With about half of Hawaii’s carpenters out of a job and a slower-than-expected economic recovery, the state’s construction industry is pinning its hopes on projects that are slated to start this year.

Those projects, according to industry experts and contractors, are in the areas of hospitality, retail, transportation and residential.

The University of Hawaii Economic Research Organization forecasts construction jobs to total 29,800 this year, then grow steadily to 36,300 by 2016.

“Construction plays a key role in the economy in Hawaii,” Pacific Resource Partnership Executive Director John White said. “This year, we’re optimistic in the tourism sector with hotels in Waikiki receiving entitlements to do hundreds of millions of dollars of improvements.”

Pacific Resource Partnership serves as a link between Hawaii’s top contractors and the largest construction union in the state, the 7,600-member Hawaii Carpenters Union.

White said tourism, which had its best year in 2011 since 2007 in terms of arrivals and spending, will continue to drive two critical sectors for substantial job growth in the construction industry: residential and rail transit.

He said there was $2.6 billion in construction work in Hawaii last year, down about 40 percent from the $4.3 billion in work in 2007. He attributed the sharp decline primarily to the depressed residential market.

“The larger-scale [residential] projects, which are reflected in projects like Koa Ridge and Hoopili — those need to return before we have robust jobs in the construction industry like we had in the mid-2000s,” he said, noting that the City and County of Honolulu’s planned elevated rail project will need to take the place of the slowing military housing market.

“Military projects for the past four years have provided a stable industry, but that has stabilized,” he said. “It needs to be replaced with size and scope comparable to military housing, which is rail transit.”

In addition, retail projects in Kapolei, such as the Laulani Village shopping center in Ewa and the Kapolei Village Center, which are both slated to open this year, should increase the number of construction jobs.

“Those projects certainly help keep our members employed,” White said. “To see the noticeable difference, you’re going to need some of these larger-scale projects to come online.”

“Rail [transit] is a different animal,” he said. “If there’s job growth in 2012, it’s likely to be because of rail and we’re ramping up now, which should continue throughout the year.”

Kiewit has construction contracts for the rail transit project, including the maintenance and storage yard near Leeward Community College.

Wilhelm said rail transit will or already has created jobs in three categories: professional staff such as engineers, craft laborers, and affiliated and secondary businesses.

Kiewit already has added 100 employees, mostly engineers, and hopes to add between 50 and several hundred more as rail construction takes shape.

In addition to rail, activity in the retail sector, condominium market and residential are all on Kiewit’s radar in the coming years, Wilhelm said.

“We’re looking at how Hoopili and Koa Ridge plays out, as far as both of its land entitlements go,” he said. “These governmental compliance issues could have an impact on the overall construction economy.”

Combined, Hoopili in Ewa and Koa Ridge in Central Oahu are planned to bring 17,000 single-family homes to the market, along with more than 1,500 construction jobs. Both developments are waiting for entitlement rulings from the state Land Use Commission. Initial construction for both won’t happen for at least another couple of years.

“Hospitality has been a core market for us,” he told PBN. “Fifty to 60 percent of our jobs historically during the last 10 years were a result of the tourism industry, and what we’re seeing is that hotel renovation work towards the end of the year will be on the rise again.”

Thompson would not go into detail about which hotel projects Ledcor will be working on this year but said each development will require between 100 and 200 jobs.

dshimogawa@bizjournals.com | 955-8036

Duane Shimogawa covers energy, real estate and economic development for Pacific Business News.

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